China brings in KWM to prepare for Evergrande’s possible restructuring: report

The Chinese government is assembling a group of accounting and legal experts to examine the finances of China Evergrande Group, the country’s second-largest property developer by sales, Bloomberg reported. This group includes King & Wood Mallesons.

Bloomberg said that regulators in Evergrande’s home province of Guangdong dispatched a KWM team last month, “adding to signs that Chinese authorities are laying the groundwork for what could be one of the country’s biggest debt restructurings.” KWM did not respond to a request for comment from ALB.

Reuters reported earlier that Evergrande, founded in 1996 in the provincial capital of Guangzhou, now has about $305 billion in liabilities.

Restructuring is one of KWM’s specialties. The firm’s website describes it as “one of the first law firms to provide debt restructuring service and to put restructuring in practice in China.” KWM has been involved in multiple high-profile restructuring cases in China, including that of the state-owned Brilliance Auto Group in 2020, and the early cases of Dongbei Special Steel Group and Chongqing Iron & Steel.

According to finance media Reorg, the Hebei government also hired KWM back in January for the restructuring of local property developer China Fortune.

Interestingly, Evergrande is also one of KWM’s clients. The law firm advised it on the 2020 Hong Kong IPO of Evergrande Property, and the strategic investment of its online home and car sales platform FCB Group. The firm also represented Evergrande in some offshore bond issuance deals.


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